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| Foreign buyers on the rise in American antique markets |
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The steady decline of the U.S. dollar has recently been bemoaned by both newspaper headlines and TV talking heads. The blame for the dollar’s loss has been cast upon several different occurrences.
The housing bubble burst, the proliferation of subprime loans in several areas of banking and the Federal Reserve’s recent interest rate slashing, among many others, are probably all good culprits.
While the depreciation of our own currency – indeed, the world’s primary reserve currency – does not bode all wine and roses for the U.S. economy, there are, and will be, many interesting outcomes. How does the dollar’s slump affect the antique industry? One of the ramifications in the antique and auction world might even be beneficial for the savvy dealer or auctioneer.
The U.S. dollar index is a weighted geometric measure of the value of the dollar against several different world currencies – the euro, the yen, the U.K.’s pound sterling, the Canadian dollar, the Swedish krona and the Swiss franc. The index was established in March 1973, with the dollar at 100. On March 16, 2008, the dollar was at 70.698 – its lowest level in the index’s 35-year history.
Indeed, foreign currencies – especially the euro – seem to be faring very well versus the dollar. On June 11, Bloomberg reported: “The dollar has fallen 11.5 percent against the euro and 7.2 percent versus the yen since September, when the [Federal Reserve] began to lower borrowing costs from 5.25 percent.” Those are hefty numbers in the currency world.
With the dollar depreciating and foreign currencies rising, foreign investors currently find more buying power in the U.S. And many are taking advantage of this increased buying power by buying antiques and fine art in the U.S.
Some international antique lovers are visiting the larger antique shows held around the country. Andrea Canady, manager of The Original Miami Beach Antique Show, has definitely seen a recent influx of international visitors. She has no doubt that this is because of the dollar. She notes that the recent Las Vegas Antique Jewelry & Watch Show brought many foreign buyers, and they were looking for high-ticket items – especially signed pieces from the likes of Tiffany and Cartier. At the Miami Beach show, Canady has seen these buyers purchasing a variety of fine art and silver – again, quality, expensive items.
Gabor Varga, a Naples, Fla.-based fine art dealer and the proprietor of Timeless Treasures, has seen a large increase in the number of foreign buyers. They’re buying important, high-end fine and decorative art. Many of these customers are from Europe, taking advantage of the strong euro to purchase pieces priced at $50,000 and higher.
European art – especially from the postwar era – seems to be especially desired. Varga credits the availability of goods in the U.S. with this dramatic influx. He notes that many European dealers are “stocking up” at U.S. shows and returning important pieces of European art to be resold in Europe.
Furniture, however, is not hot among these foreign buyers, due partly to shipping costs.
The antique and fine art auction industry is also seeing many new foreign bidders.
However, the origins of many of these bidders at first seem surprising.
Matt Quinn of Quinn’s Auction Galleries in Falls Church, Va., reports that he has seen a remarkable increase in the number of Chinese and Russian buyers.
According to Quinn, “We have the stuff; they have the money.” China and Russia, two rapidly emerging world markets, have both seen recent economic spikes and newfound wealth.
The BRIC (Brazil, Russia, India and China) theory even surmises that these four countries will be among the most dominant world economies by 2050.
The Chinese and Russian bidders seem to be “buying whatever they can get their hands on” – usually Chinese and Russian art and antiques, which they then “repatriate.” As their economies grow in strength, their money goes further against the dollar, making the U.S. a hot spot for antiques. They’re bidding either online, via phone or even flying in for auctions.
Quinn also credits the Internet with the leaps-and-bounds growth in foreign interest.
“The Internet has opened up the marketplace to the globe,” he says.
He notes that even smaller auction houses can use the Internet to attract foreign buyers. Databases such as Artfact can connect American auction houses to the world.
Heritage Auction Galleries of Dallas has also received attention and bids from international customers. Heritage boasts Heritage Live, which lets bidders compete online with streaming audio and video.
So far, the program has more than 375,000 registered bidders from more than 164 countries. The site receives about 20,000 unique visitors per day, who spend an average of 11 minutes there.
Heritage is also seeing an inrush of Chinese and Russian customers. Warren Tucker, director of Heritage World Coin Auctions, reports, “We probably sold over $2 million in Russian coins in our June Long Beach sale, and I’d say that 95 percent of the buyers were Russians. We’re also seeing a tremendous amount of movement in Chinese coins.”
Russian art is also bustling at Heritage, and a June 4 sale of fine art from that country brought in more than $2.5 million. Dr. Douglass Brown, consignment director for Russian art, notes, “Russians are bidding on and winning almost all of (the higher-end Russian artworks) and taking them back to their homeland in an effort to repatriate the fine art of Russia.” Brown also states that some well-to-do Russians are buying collections of art to donate to Russian museums.
Kelley Norwine, Heritage’s vice president of media and public relations, perhaps says it best: “Most of the buyers are doing so as an investment; however, many are buying from their heart. They want a piece of their past – something to remind them of their homeland… our recent (art sale) had Russian buyers from such cities as London, Jerusalem and New York, in addition to St. Petersburg and Moscow.”
If the dollar continues to depreciate against other world currencies, the antique industry should brace itself for an increase of international collectors – many of whom are from the world’s emerging economic powers. |
| 9/17/2008 |
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